IRS, MO State Govt Crackdown on Unemployment Claims
January 12, 2015 Unemployment No Comments

The Crack Down Begins

The State of Missouri is teaming up with the IRS to crack down on fraudulent unemployment claims.  In 2014, over 4,500 unemployment claims were filed, and more than $19.7 million in overpaid benefits were paid in 2013.  The State of Missouri is actively seeking to recover the overpaid benefits with the help of the IRS through the Treasury Offset Program.

The dismissive attitude among some unemployment benefit recipients have been met with a more aggressive response than they anticipated.  Some individuals who are contacted about their over-payment of benefits take an approach of, “It’s just another debt, I have nothing, so I am not worried.”

As a Missouri unemployment lawyer, I’ve had employees of the IRS who have fraudulently received benefits; some of whom have not only lost their current job, but have also been criminally charged.

Financial Blow Back From Fraudulent Claims

Fraudulent claims not only cost Missouri; the burden of unemployment costs lay heavily upon employers.  That’s why employers should take a harder look at unemployment costs.  Some employers wrongfully accept unemployment taxes as an uncontrollable expense, which could not be further from the truth.  Simple housekeeping measures could save employers a considerable amount of money without their having to spend much in order to control or reduce the expense of the unemployment tax.

How Employers Can Take Action

A proactive approach to controlling the expense begins with opening and reading mail.  The state sends to employers a notice of a claim whenever one is filed.  There might be a claim for someone who didn’t even work for you in a chargeable base period.  The claim may allege a lay-off when in fact it is a termination.  When an employer receives a notice of a claim – the employer has a limited amount of time to challenge (protest) the claim.  If the deadline passes, you miss the opportunity to challenge the claim and you lose your status as an “Interested Party.”  Consequently, you will lose your ability to appeal the award of benefits.

Don’t Get Lost In Red Tape

A prudent approach to handling a notice of claim is to immediately challenge the claim before circulating the claim among departments and waiting for a decision on whether to fight the claim or not.  A timely challenge protects an employer’s rights. An employer can later withdraw their challenge.  Soliciting an opinion as to whether or not to protest often results in missing the deadline to file a challenge.  Often the person who makes the decision as to whether to protest is someone without knowledge of what makes a valid claim. Often it is made by someone whose department within the company is not responsible for the unemployment taxes and so their decision is made based on the impact of the perceived hassle as opposed to the company’s bottom line.

The challenge of a claim, which in Missouri is referred to as a “Protest”, can result in a unemployment “Appeal Hearing.”  Since these hearings are automatically set for a phone hearing, unless a request for an in-person hearing is made, it is often seen as an informal process but the hearing is anything but informal.  Rules of evidence, statutory law, and case-law are applied.

Attorney Kenneth Carp handles unemployment hearings for St. Louis employers on a routine basis.  This week alone Kenneth Carp, also a retired Air Force Lt. Colonel, has 14 hearings.  He has a fixed pricing structure which is very affordable for employers.  He can also review a company’s approach to unemployment and make constructive recommendations on how to put systems in place to monitor and control the unemployment expense.

Questions about unemployment can be directed to Kenneth Carp at kennethcarp@kcarplaw.com or by calling 636-947-3600.

Written by kennethpcarplaw@gmail.com